Malawi

EITI Status Yet to be assessed against the 2016 Standard
EITI Member Since 2015
Latest Data From 2015

Overview

The country is a small producer of uranium, gemstones, coal and construction materials, although the government is promoting investment in the extractive industries to reach 20% of GDP in 2020. Some have expressed concerns about the sector’s environmental impact, distribution of benefits and license awards, particularly related to the oil exploration around Lake Malawi. Malawi is implementing the EITI to build trust amongst stakeholders in the mining, oil and gas sectors.

Malawi published its first EITI report in April 2017 covering the oil, gas, mining and forestry sectors.

Extractive industries contribution

  • 0.6 %
    to exports
  • 0.9 %
    to GDP
  • 1.1 %
    to government revenue
  • 0.2 %
    to employment

Beneficial ownership disclosure

Objectives of beneficial ownership transparency in Malawi

  • Increasing the contribution of the mining sector to Gross Domestic Product (GDP) from less than 1% to 20% by 2025;
  • Promoting good governance and accountability in the extractive sector;
  • Deterring corruption in the allocation of extractive rights;
  • Preventing abuse of Malawi’s taxation system;
  • Support of efforts to address money laundering and other financial crimes in the economy;
  • Promoting Malawian citizens’ participation in the monitoring of extractive activities, including local content provisions and;
  • Promoting citizens getting the full economic benefit of the nation’s natural resources, especially in communities where extraction is taking place.

Progress on implementing beneficial ownership disclosure 

As there is currently no petroleum production in Malawi, most of the companies which will be required to disclose their beneficial owners are those with exploration licenses, in particular in the mining sector. According to Malawi’s scoping study from February 2016, government agencies involved in the EITI process see no legal obstacles to beneficial ownership disclosure. Companies applying for mineral rights must provide information on beneficial ownership to the Department of Mines, although further efforts will be necessary to allow for this information to be included in Malawi's first EITI Report.

Malawi EITI plans to organise conferences to domesticate the definition of beneficial ownership and organise a series of workshops to build capacities of relevant institutions to champion and facilitate implementation of  beneficial ownership disclosure. Read Malawi's beneficial ownership roadmap below for more information.

Government will ensure that in the future, mining contracts are properly negotiated to maximise benefits for the country. In this regard, Government will establish an independent contract negotiating unit in extractive resources.
HE Peter Mutharika, President of the Republic

Production

Malawi is a small producer of uranium, rock aggregate, bituminous coal, gemstones, limestone and a range of construction materials. The country is also promoting oil and gas exploration, particularly around the Lake Malawi region. In the latest 2014/15 Malawi-EITI Report, rock aggregates accounted for more than half (56%) of production, followed by coal (25%). 

Mineral Production (Tonnes)

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Natural resources 

Malawi has deposits of uranium, coal, limestone, bauxite and rare earths.

CommodityReservesUnitSignificance
Uranium11,337metric tonsU3O8 content, from total reserves of 10.46 million tons of ore.
Coal, bituminious21.4million metric tons
GemstonesN/Akgs
Limestone25million metric tons
Bauxite28.8million metric tonsWith average grade of 43.9% AL2O3
Beach dune sand700million metric tonsWith an average grade of 5.6% total heavy mineral sands (ilmenite, zircon, rutile, monazite and garnet)
Rare earths2.5million metric tonsWith 4.2% rare earths content and substantial inferred resources.

Revenue collection

According to the MEITI 2014/15 report, total revenue for the extractive sector was MWK 5,935 million (equivalent to USD 13.6 million) of which 49% came from forestry, 40% from solid minerals, and 11% from oil and gas. These revenues were mainly collected through royalty tax, resource rent tax and corporate income tax and log sales.

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Reconciled revenues by company (Top 5 companies)

Social and economic contribution

According to Malawi's EITI Report 2014/15, the mining sector contributed 0.9% to Malawi’s GDP in 2014. Developing the mining sector is a  national priority and the target is that by 2020 the sector would contribute 20% of GDP. In total, the small extractive sector contributed 1% to government revenue, 0.6% to export and about 0.2% of employment. Almost 13,200 people were employed in the mining sector in 2015, an increase from about 12000 in the previous year. 

Innovations

The EITI encourages multi-stakeholder groups to explore innovative approaches to make the EITI more relevant and useful.

  • The first EITI Report provides information about the legal/fiscal framework, revenues and contribution of the forestry sector to the economy. 
  • EITI Malawi intends on producing a checklist for agencies awarding licences and contracts to ensure due diligence of investors is performed.

Implementation

Malawi EITI aims to be a key part of Malawi’s reforms to increase transparency and accountability in the natural resource sector. The work plan includes strategic goals like building trust between stakeholders and strengthening partnerships. Malawi EITI has published the first EITI Report which covers the fiscal year 1 July 2014 to 30 June 2015 and a three-year roadmap for beneficial ownership disclosure.

Governance

The government announced its intention to implement the EITI in a Presidential address to the 45th session of Parliament on 17 June 2014, although this commitment was already included in the government’s March 2013 Mines and Minerals Policy. Malawi had undertaken previous preparatory work, as outlined in the (then) Ministry of Finance and Development Cooperation’s October 2011 overview of work done in Malawi’s EITI debate. The ToR of the multi-stakeholder group, chaired by HE Goodall Goondwe, Minister of Finance, Economic Planning and Development, gives four seats each to the three stakeholder groups (with alternates). Members are appointed for three years renewable.

Timeline

 

Validation

Malawi’s Validation against the Standard will commence on 1 September 2018. The country was admitted as EITI candidate in 2015.